Trump country hit hard by Chinese tariffs

The brunt of the penalties are likely to affect U.S. soybean growers. Nearly one-third of U.S. soybeans, or about $14 billion, is sent to China each year, where the commodity is primarily used to feed China’s enormous pork industry. Now that the commodity is about to become significantly more expensive, Brazil and other alternative soybean growers will be the beneficiaries of the escalating tensions. The latest actions will be on top of the tariffs on about $3 billion in U.S. goods — including fruit, nuts, pork and wine — that China imposed in response to Trump’s decision to place tariffs on imports of steel and aluminum using national security justifications. Much of the damage to commodity prices has already been done because of the uncertainty surrounding whether the Trump administration will follow through with each new round of tariffs. Already, China has been looking to Brazil for long-term relationships. “The markets have really dropped. We don’t know what will happen for months or maybe even years, and that is a big deal,” Gloy said. He added that expected profitability for soybeans has fallen by nearly $100 an acre in the past few months. China will have to purchase at least some portion of its soybeans from the U.S. However, it will likely cut back on its purchases by several million bushels, Morrison predicted. And while other countries could flock to the U.S. market to take advantage of lower soybean prices, they won’t be able to offset U.S. losses from the Chinese market, which consumes 65 percent of the soybeans traded worldwide. Meanwhile, other U.S. agricultural sectors like pork and fruit are about to be hit with a second wave of retaliatory tariffs by China. All the various duties on U.S. pork cumulatively add up to 71 percent in tariffs, according to Rabobank, and could effectively shut it out of China’s market.